Miller Brothers Has Determined That an Operating Cash Flow of $24,300

question 41

Multiple Choice

Miller Brothers has determined that an operating cash flow of $24,300 will result in a zero net present value for a proposed project. The fixed costs of the project are $9,360 and the contribution margin is $4.30. The company feels that it will capture 18 percent of the 60,000 unit market for this product. Should the company develop the new product? Why or why not?

• A) Yes; because the financial break-even quantity is 7,828 units.
• B) Yes; because the financial break-even quantity is 8,001 units.
• C) Yes; because the anticipated market share exceeds the break-even quantity by 2,403 units.
• D) No; because the financial break-even quantity is 7,828 units
• E) No; because the financial break-even quantity is 8,001 units

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Definitions:

Confrontational

Being confrontational refers to a tendency to challenge or oppose others directly and aggressively.

Win-Lose Approach

A competitive strategy where one party's gain is perceived directly as another party's loss.

Conflict Manager

A professional who specializes in identifying, addressing, and resolving conflicts within organizations or between individuals.

Competitor

An individual or company that competes against others for the same market share or audience in an industry.